Editor’s note: This is a letter that James Haney, president of Wisconsin Manufacturers & Commerce (WMC) recently wrote to state Commerce Secretary Dick Leinenkugel, in response to this letter.
Dear Dick:
I am responding to the letter you sent on May 1 regarding Wisconsin’s business climate and the Thomas Industries decision to move its Sheboygan production to Monroe, Louisiana.
First, let me say that I am sure you and the Department of Commerce did all that you could to retain the plant and the production jobs. The fact that the state of Louisiana was able to offer a more attractive package is a source of frustration for all of us. We regularly hear from members who have been offered incredibly attractive incentive packages to move their facilities to other states. For example, Michigan recently concluded a deal with Johnson Controls to build a battery plant in that state that involved more than $148 million in tax abatements and other incentives. Unfortunately, Wisconsin does not appear to be very competitive in this area and given the states’ current fiscal condition, it is unlikely we will become competitive any time soon.
That is part of the reason why the issue of the overall business climate is so important. By all accounts, Wisconsin does not have a competitive business climate. We hear that from our members, and it is routinely reported in national business publications. In fact, we frequently show up on lists of the 10 worst business climates in the country. While WMC is sometimes criticized for raising business climate issues, the unfortunate reality is that our problems are widely documented in national publications and well known to business leaders nationwide.
By raising these issues here at home, we are trying to help the public and policymakers understand the gravity of the problems. Our concern is that if we stay on our current track, Wisconsin may not fully recover from the current recession.
Policies proposed by Governor Doyle, and currently under consideration by the Legislature, are likely to make matters worse. As Commerce Secretary, what is your take on the economic impact of the various budget proposals?
Do you think a 25 percent hike in corporate incomes taxes will make Wisconsin more competitive?
Do you think a 50 percent increase in capital gains taxes will help us retain or attract new investment in Wisconsin businesses?
Do you think opening the litigation floodgates will help small businesses survive in a tough economy?
Do you think driving international shipping away from Wisconsin ports will help manufacturers compete?
Do you think extending prevailing wage laws to private projects will make our economic development programs more useful or effective?
I’m afraid the full list of harmful proposals is much longer.
Fortunately, there is still time to change course. We hope you will work with us to alert the governor and legislative leaders to the risks that some of these proposals pose to our economy, our ability to recover from the current recession, and job growth in the future.
The issues surrounding Wisconsin’s business climate are not political and not partisan. They are, however, very real; and until policymakers acknowledge that Wisconsin has a business climate problem and take steps to respond, we will continue to put a spotlight on the issues.
Best personal regards.
Sincerely,
James S. Haney
